AstraZeneca PLC

Good morning to those joining from the UK and the US, good afternoon to those in Central Europe, and good evening to those listening in Asia. Welcome, ladies and gentlemen, to AstraZeneca's First Quarter Results webinar for investors and analysts. Before I hand over to AstraZeneca, I'd like to read the Safe Harbor Statement. The company intends to utilize the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Participants on this call may make forward looking statements with respect to the operations and financial performance of AstraZeneca. Although we believe our expectations are based on reasonable assumptions, by their very nature, forward looking statements involve risks and uncertainties and may be influenced by factors that could cause actual results to differ materially from those expressed or implied by these forward looking statements. Any forward looking statements made on this call reflect the knowledge and information available at the time of this call. The company undertakes no obligation to update forward-looking statements. Please also carefully review the forward-looking statements disclaimer in the slide deck that accompanies this presentation and webinar. There will be an opportunity to ask questions after today's presentation. Please use the raise a hand feature to indicate you wish to ask a question and remember to unmute your line when invited to speak. And with that, I'll now hand you over to the company.

A warm welcome to AstraZeneca's first quarter 2024 presentation, conference call and webcast. I'm Andy Barnett, Head of Investor Relations at AstraZeneca. And before I hand over to Pascal and other members of the executive team, I would like to cover some important housekeeping points. Firstly, all of the materials presented today are available on our website. This slide contains our safe harbor statement, which I'd encourage you to take the time to read. We will be making comments on our performance using constant exchange rates, or CER, core financial numbers, and other non-GAAP measures. A non-GAAP to GAAP reconciliation is contained within the results announcement. All numbers quoted are in millions of US dollars unless otherwise stated. This shows the agenda for today's call, and following our prepared remarks, we will open the line for questions. As usual, we will try and address as many questions as we can during the allotted time, although I would ask participants to limit the number of questions you ask to allow others a fair chance to participate in the Q&A. And with that, Pascal, I will hand over to you.

Thank you, Andy. Good day, everybody. I'm pleased to report that we have made a very strong start in 2024. Total revenue grew by 19% in the first quarter, reflecting continued strong demand, and co-earnings per share rose by 13%. Recall the first quarter of 2023 benefited from a $240 million gain in other operating income following the divestment of Pelmicard Flex Seller in the U.S. Collaboration revenue and other operating income were minimal this quarter, which makes the EPS year-over-year growth all the more impressive. We are also pleased to announce an increase in the annual dividend of 7% at the Annual General Meeting earlier this month. This increase is in line with our progressive dividend policy and reflects the continuing strength of AstraZeneca's investment proposition for shareholders. Please advance to the next slide. We saw strong double-digit growth across our therapy areas in the first quarter. This is also the first quarter where quarterly revenue from our oncology and biopharma businesses exceeded $5 billion and rare diseases exceeded $2 billion, reflecting the value our medicines bring to patients globally. We saw 19% growth in both the US and Europe this quarter, driven by strong demand. Our business grew substantially in the emerging markets, and growth was especially pronounced outside of China, driven by our sustained presence and commitment to these markets. Next slide, please. As strong pipeline momentum has continued into 2024, we announced positive trial results for LoRa and Adriatic, both of which have been selected for presentation during the ASCO plenary, reflecting the important benefits seen for lung cancer patients. As a reminder, there are five presentations at the plenary, so two out of five is a very unusual result. We saw a number of exciting new approvals in the first quarter. The approval of TAGRISO in combination with chemotherapy establishes a new benchmark for efficacy in frontline EGFR-mutated non-small cell lung cancer. The approval of an HER2 in previously treated HER2-positive cancers is the first tumor-agnostic approval for a HER2-directed therapy and offers new hope for patients with a wide range of cancers. And finally, Ultomeris was approved in an MOSD, and we are now working on establishing Ultomeris as the new standard of care for this debilitating disease. These approvals further build on the momentum we are seeing from other recent approvals listed here, and we are investing to ensure that each of these new opportunities reach full commercial potential. Adriatic and LoRa, if approved, coupled with the three approvals I've just described and the ongoing launches, have the potential to deliver several billion dollars in total revenue, additional revenue, in 2030. And this is what our pipeline is delivering in the first quarter of 2024. With that, please advance to the next slide, and I will hand over to Arad now, who will take you through our first quarter financials.

Thank you, Pascal. And as usual, I will start with our reported P&L. Please turn to the next slide. Total revenue in the first quarter increased by 19% to $12.7 billion, predominantly resulting from strong product sales, which grew by 18%. The underlying demand for our medicines across the board was very strong in the quarter across both brands and across geographies. And HER2 and Tespire continued their strong growth trajectory, and as a result, Alliance revenue increased by 59% to $457 million, driven by profit shares in regions where our partner book product sales. Please turn to the next slide, which shows our core P&L. The product sales core gross margin was 82% in the quarter. As previously stated, we still expect gross margin for the year to be slightly lower than last year due to strong growth for partner medicines, including Inher2 and Tespire, as well as increased product supply to Sanofi for before this into the 2024-25 RSV season. In the second half, we see additional impact from usual seasonal impact from medicines such as FluMist. Total operating expense increased by 15% in the quarter. R&D spend increased by 18%, partly driven by the Phase III trial starts, including our DAPA combinations with BaxterStat and Belsinarone. We continue to anticipate R&D spend will remain in the low 20s percentage of total revenue, inclusive of investments we are making to maximize the potential medicines acquired in recent business development transactions. We continue to show operating leverage. Supporting the 19% revenue growth, SG&A increased by 13% in the quarter. We have seen strong initial uptake for AirSupra, TrueCap, and Venua in the US, and we're investing behind this revenue growth, as well as behind our existing brands, such as Breasttree and Forsythia. We're also increasing our promotional efforts behind our rare disease medicines to support continued growth. We anticipate quarterly variations in our operating expenses given the dynamic nature of our business. Despite the limited contribution from other operating income this quarter, we saw core operating profit growth of 15% and core EPS of $2.06. Please turn to the next slide. In the first quarter, cash flow from operations was $2.5 billion. We saw capex of $417 million in the quarter, and we continue to anticipate capex to increase by approximately 50% on a full year basis to support increased manufacturing capacity and support our growth. We had deal payments of $2.9 billion, including upfront payments for ICOSAVAX and Grayscale Acquisition, both of which closed during the first quarter. We also paid the third and final payment to the former shareholders of Asserta. Lastly, we paid the second interim dividend for 2023. At the end of our Q1, our net debt to EBITDA ratio was 1.9 times. We anticipate the announced fusion and AMOLED transactions to close in the coming months, strengthening our radiopharmaceutical capabilities and expanding our presence in rare endocrinology. As a result of recent business development and debt refinancing, we expect finance expenses to grow compared to prior year. Reflecting the strength of our business, we are reiterating our full-year guidance for both total revenue and core EPS at constant exchange rates. With that, please advance to the next slide, and I will hand over to Dave, who will take you through our oncology performance.

Thank you, Radna. Next slide, please. Oncology total revenues grew 26% to $5.1 billion in the first quarter, driven both by double-digit growth across all regions and strong demand for our key medicines. Tegriso global revenues grew 15% in the quarter, reflecting continued global demand for Adora and Flora. Following U.S. approval in February, we've seen strong initial interest in early uptake for FLORA2 in the frontline setting, with oncologists particularly focused on patients with L858R mutations and CNS metastases at baseline. Limparsa delivered product sales growth of 11% in the first quarter and remains the leading PARP inhibitor globally across all tumor types. Infinsi total revenues grew 33% on continued strength in biliary tract cancer with Topaz-1, which is now approaching peak market share penetration in the U.S., Japan, and Europe. Launches continue at pace across emerging markets where biliary tract incidence and prevalence is high. And as previously communicated, we recognized a 25% mandatory price reduction in Japan effective from February 1st and anticipate a second mandatory price discount later this year. For the first time, we have split out M.Judo in our reporting and are pleased with its launch trajectory. We've established a strong foundation in hepatocellular carcinoma with Himalaya and see continued growth in non-small cell lung cancer with Poseidon. CalQuint's total revenues increased 35% in the first quarter, driven by sustained BTK inhibitor leadership and frontline CLL across the U.S. and Europe. And HER2 total revenues increased 79% in the first quarter. Again, we drove sequential market share growth in second-line HER2-positive breast cancer in the U.S. and Europe, where considerable growth remains. We see continued adoption in HER2 low across many global markets and eagerly await the Destiny Breast 06 readout, which brings the potential for further expansion moving into HER2 one line earlier. Following approval in November last year, we are pleased with the strong TrueCap adoption in the biomarker altered population, achieving $50 million in the first quarter total revenues. Looking forward, we anticipate further expansion of TigrisO with the approval of FLORA2 and frontline non-small cell lung cancer and maximizing the U.S. launch of InHER2 across HER2-expressing tumors. Lastly, we're excited that both Adriatic and limited stage and LoRa and stage 3 unresectable lung cancer have been selected for the ASCO plenary session. Each of these represents substantial growth opportunities in the near future and beyond, as Pascal has already outlined. With that, please advance to the next slide, and I'll hand over to Susan to cover key R&D highlights in the quarter.

Thank you, Dave. We've had an exciting start to the year with a number of key presentations, including data for our new generation PARP inhibitor, Seruparib, in advanced solid tumors presented at this year's AACR. This quarter, we announced the proposed acquisition of Fusion Pharmaceuticals, furthering our ambition to redefine the backbone of current cancer treatment. Along with chemotherapy, radiotherapy has been a mainstay of cancer treatment for decades. In fact, 30 to 50% of all patients receive radiotherapy. Whilst this treatment is effective, there's also toxic off-target effects. Fusion has developed a clinical stage portfolio of radioconjugates that are designed to deliver radiation therapy to tumor cells in a more targeted manner than external beam radiation. As we've discussed already, we believe the future of cancer care is in combinations, and there's immense potential to combine radioconjugates with other modalities in our pipeline, including next-generation IO bispecifics, cell therapy, T-cell engagers, and our DNA damage response agents. Importantly, the planned acquisition of Fusion accelerates our radiopharmaceutical manufacturing to commercial-scale capabilities by over three years and offers additional security in actinium supply, with multi-source supply agreements in place. The lead pipeline candidate, FPI2265, has potential to be the first actinium-based PSMA-targeted radiotherapy approved for the treatment of post-lutetium metastatic castrate-resistant prostate cancer. FPI2265 is differentiated and has potential to be both more potent and tolerable than currently approved beta- and metacoradioconjugates. Data presented earlier this month at AACR demonstrated further validation of FPI2265's efficacy and tolerability. PSA50 response was achieved in 50% of patients overall and in 43% of the lutetium-treated patient population and 54% of the lutetium-naive population. Furthermore, there were zero discontinuations related to xerostomia, a common toxicity. We believe that our proven expertise in targeted delivery, together with Fusion's clinical stage portfolio and manufacturing capabilities, presents an opportunity for clear leadership in the radioconjugate space. And with that, please advance to the next slide and I'll pass over to Ruud to cover biopharmaceuticals performance.

Thank you, Susan. Next slide, please. Vibe Pharmaceuticals delivered total revenue of $5.2 billion in the first quarter of 2024, representing growth of 16%. Our key underlying growth drivers remain in place, including the continued growth of the largest cardiorenal medicine on the market, Varsiga, the increased uptake of our biological medicines in severe asthma, and the ongoing momentum behind Breast3, our inhaled COPD medicine. In the United States, demand for FASIGA was strong in the quarter and benefited from the launch of an authorized generic. We saw solid growth in emerging markets despite the entry of generic competition in some countries. Presently, we still anticipate FASIGA may be included in China VBP in the second half of 2024. Additionally, we saw a strong Symbicord performance in the first quarter, despite generic pressures. This was particularly evident in emerging markets, where we saw strong underlying demand in both China and ex-China markets, strengthening its position as market leader in the region. Awareness of Air Supra continues to grow, and more than 18,000 healthcare practitioners have prescribed this new medicine, translating into 65,000 prescriptions in the quarter. The performance has been particularly strong among specialists. AirSupra already has over 15% of new share prescriptions by allergists and over 10% share of prescriptions from pulmonologists. As AirSupra is still in the first few months of launch, our revenues in Q1 did not reflect the full extent of initial demand due to introductory discounts. These introductory discounts will fade through the year as we continue to expand access. Awareness is also building for Wenua, and we are very pleased to report our first revenues this quarter, following its recent approval for ATTR Polyneuropathy in the United States. Wenua has only been available for a few weeks, but we are seeing good uptake among patients, including some who are new to the class of medicine and some that have switched from other brands. Finally, we saw continuous sales from Bay Fortis in Q1, albeit with the expected seasonal drop versus Q4. We were particularly pleased to see the real-world data coming out of the US, with the Center of Disease Control reporting that Bay Fortis was 90% effective at preventing infants from being hospitalized with RSV. Next slide, please. I will now hand over to Sharon to discuss our ongoing development program for Wynua in TTTR cardiomyopathy, where we have the potential to reach up to half a million patients globally.

Thanks, Ruud. I wanted to take the opportunity to highlight results from a 66-week analysis of exploratory cardiac endpoints in the Phase III neuro-transform study of Wynua in hereditary ATTR polyneuropathy. In a predefined cardiac subgroup of hereditary ATTR polyneuropathy patients, treatment with aplonterson showed stabilization or improvement in cardiac function and structure relative to external placebo, including levels of NT-proBNP, a measure of cardiac stress, and a trend towards improvement in echocardiographic parameters such as left ventricular wall thickness, diastolic, and stroke volume. These results provide confidence in our Phase III CardioTransform trial in ATTR cardiomyopathy. ATTR cardiomyopathy is a systemic, progressive, and fatal condition that typically leads to progressive heart failure and often death within three to five years from disease onset. With more than 1,400 patients enrolled, CardioTransform is the largest, most comprehensive ATTR cardiomyopathy study, and importantly includes cardiovascular outcome endpoints. In other key programs, we continue to maximize the opportunity for our best-in-class SGLT2 inhibitor, Parciga. We have the potential to manage cardiorenal disease through three distinct mechanisms. Complementary dual mechanisms combining dapagliflozin with balsinrinone, Baxterstat, or zebotentin. I am delighted to announce that all three combinations are now in phase three. Please move to the next slide, and I will now hand over to Mark, who will cover our rare disease portfolio.

Thank you, Sharon. Can I get the next slide, please? I'm delighted to report rare disease delivered a first $2 billion total revenue quarter, up 16% year on year. The growth rate at CR includes a small benefit from countries with high inflation. Growth was driven by knowledge indication, increased patient demand, and launches in new markets. In the quarter, Iltomeris revenue grew 34%, with a vast majority of growth coming from generalized myasthenia gravis. GMG patients grew by 41%, driven by demand in Europe and established rest of the world. In the US, we saw the highest number of new-to-brand patients in the quarter, supported by our increased promotional activities. During the quarter, we received U.S. approval of Ultomerase in MOSD. In the Phase III Champion and MOSD trial, Ultomerase demonstrated zero adjudicated relapses over 138 weeks. Given the strength of this data, we expect Ultomerase to be the treatment of choice for relapsing patients naive to biologics. We expect patients on Soliris to convert to Ultomerase over the short term. Following approval in the US and EU of Voidea, an add-on therapy ensures that PNH patients who experience clinically significant extravascular hemolysis are able to continue on standard of care ultramiris or soliris. Beyond complement, both Strensic and Cosilugo grew 21% and 80%, respectively, driven by patient demand as well as order timing in certain tender markets. Please advance to the next slide. During the quarter, we announced our plans to acquire Amolid Pharma, which includes a Phase III asset, Enaboparatide, for patients with hipoparathyroidism. Hippoparathyroidism is characterized by deficiency in parathyroid hormone production, which results in significant dysregulation of calcium and phosphate, leading to life-altering symptoms and complications, potentially including chronic kidney disease. It is one of the largest known rare diseases. Phase II aid data from Enneboparatide showed a normalization of serum calcium level and a reduction in dependence on daily calcium and vitamin D supplements, both clinical priorities for treating patients. Data also suggested that Enneboparatide has the potential to restore normal bone turnover and preserve bone mineral density. We believe Enneboparatide has blockbuster potential and anticipate data from the Phase III calypso trial in 2025. With that, please advance to the next slide, and I will hand back to Pascal for closing remarks.

Thank you, Marc. Can I have the next slide, please? As you have heard, our company has made a very strong start to 2024 with demand for our medicines continuing to grow. Looking ahead, we are once again anticipating multiple pivotal trials to read throughout the remainder of the year. Several important potential catalysts are shown here, as well as Destiny Breast-06, which Dave spoke about earlier. I would like to highlight CAPITALO-281, which will be the first registration or study of TrueCap in prostate cancer, an important potential new growth driver for this medicine. Since our full year 2023 update, we have initiated the eight pivotal trials shown here, all of which are potentially transformative for patients and could meaningfully accelerate our growth. In addition to the exceptional delivery from our internal pipeline, we've also been very active with business development, building capabilities and adding new platforms to strengthen our R&D efforts in key areas, which we believe have the potential to radically improve patient outcomes, including radioconjugates, gene therapies and cell therapies. We're very much looking forward to sharing more details about our pipeline and the long-term outlook for our company at our upcoming investor day on the 21st of May. Please advance to the next slide and we will go to the Q&A. As Andy mentioned at the start of the call, Please limit the number of questions you ask to allow others a fair chance to participate. For those online, please use the raise your hand function on Zoom. And with that, let's move to the first question, which is from James Gordon at JPM. Over to you, James.

Hello, James Gordon, JP Morgan. Thanks for taking the questions. First question is on 24 guidance. So it's very strong revenue growth, 19%. In order not to grow revenues at teens per year, it looks like you'd need to only grow at about 10% for the rest of the year. So in terms of headwinds, we should be mindful of that would drive nine percentage points of deceleration. And I heard a comment on maybe Fazega BBP and Infimsi price in Japan, but anything else? And in particular for Fazega, Simbacor and Tigriso that were very strong this quarter. Are there things through the year we need to watch out for? Or does that look quite sustainable? And also on 24 guidance, just on OPEX, the ratios look pretty good today. But this is with a strong top line before the two deals close. So if revenue growth is a little slower through the year and you consolidate these deals, do we need to be careful on those ratios or can you still keep a pretty high margin? And if I could squeeze in a quick second question, just EcoGene and the Oral GLP-1. So I believe you've expanded the trial and maybe taking dosing higher. So on that, what is the latest thinking in terms of where we might see the data? I didn't see a reference to ADA. And how are you now thinking about how competitive this product might look in terms of the weight loss and other aspects versus some other recent readouts from competitors?

Thank you, James. James, sorry, Aradna, maybe you can take the first one. And Sharon, would you take the second one?

Great. Thank you, James, for the question. It is obviously early in the year. And as you know, generally, we don't update or provide more color on the guidance in first quarter. You've seen from the reported results the underlying trend in our revenue product sales is very, very strong across the board. You've also mentioned some of the uncertainties that Ruud also mentioned, as well as Dave. So those uncertainties are there for the remainder of the year. However, if our momentum continues the way it has been in the first quarter and some of these uncertainties on VBP pricing, et cetera, are in our favor, you can think about our product revenues or product sales and alliance revenues could be at the upper end of our range or higher. But again, we're not updating our guidance at this point. We will continue to invest in our R&D for the long term, including the acquired product, and continue to invest in SG&A to drive the drop line momentum that you've seen. Operating leverage continues to be a focus for us. Again, you've seen this quarter as well, 19% revenue growth and 13% SG&A growth. And we will try to maintain stronger revenue growth than expense growth in the coming quarters as well. That may be Sharon.

Sure. So thank you for the question about AZD5004, our oral GLP-1 receptor agonist. We're really excited about this molecule and its potential to treat the interrelatedness of cardiometabolic and cardiorenal disease. You asked specifically about the Phase 1 study, and as I'm sure you're aware, we completed, together with Ecogene, a highly controlled inpatient Phase 1 earlier this year. We have the data in hand and look forward to presenting that at an upcoming medical conference later this year. You also asked about how we view the competitive position of this molecule, and recognizing that it is a highly competitive field, we do feel very optimistic about the potential for this molecule as a standalone as well as in combination. So when we think about how we're treating obesity and metabolic health, I think we honestly do ourselves a disservice by referring to this as obesity. What I'd like us to do is think about this more clearly as treating the interconnectedness of disease. And to that end, we are uniquely well positioned to combine this orally available molecule with other molecules in our portfolio that help address those interrelated diseases. As an example, combining 5004 with our SGLT2 inhibitor So when we think about this, we can imagine that at a fixed dose, we may want one dose that would be compatible for fixed dose combinations and another dose that would be more compatible for additional weight loss in obesity indications. And we'll keep that in mind as we continue to design our clinical development programs moving forward. We have publicly stated that we will be launching two phase 2B studies later this year, one in obesity and one in type 2 diabetes.

Thank you, Shana. James, you asked the question of the dose, but you've got to remember that not everybody needs to lose the same amount of weight. And so as you target higher weight loss, as Sean was talking about in the obesity segment, you would expect to have to go through a titration regimen and get to a higher dose. So it's not surprising that we would explore different doses depending on how much weight loss patients are needing. The next question is Simas Fernandez at Guggenheim. Over to you, Simas.

Great. Thanks for the question. I guess, Pascal, a little bit of a preview of the upcoming analyst event. Just hoping that you could provide us with a little bit of color on how you're thinking about potential for updated guidance. Is the most important factor of the meeting really giving and helping us understand long-term visibility around revenue? or is it more on margins or a little bit of both? And then just a second question, as we think about the three products that you've highlighted on the biopharma side of the business, the oral PCSK9, the GLP-1, and the long-acting amylin. Just hoping you could help us or help provide some context around of the three, which you're most excited about, and perhaps when we might see data on all three. Thanks.

Thanks, Simas. So the first question about the investor day, I guess I would like to invite you to join us in beautiful Cambridge to see more of the details of what we're going to present. But the short answer to your question is a little bit of both. Essentially what we want to do is show people how we are looking at what I call today, tomorrow and the day after. Today is what do we intend to deliver in terms of our financial progression in 2024, 2025, 2026. Tomorrow is what are the products we are going to launch that will drive our growth between 2025 and 2030? What is our strategy there? What do we intend to do with our pipeline? And what are the products we believe are growth drivers to 2030? And the day after tomorrow is really the sort of post 2030 period. and what are what do we believe are the technologies that will shape the future of medicine in oncology and beyond and how are we building some of those platforms that will help us shape participate in shaping the future of medicine in in the therapy areas where we are so that's really what we want to do at the investor day and we also offer for those of you who are early risers and will be physically on site we'll also give you a chance to look around our site and experience a little bit what we have on site. The second question, let me give you a couple of comments and then maybe Rod and Sean could add. We're always more excited about products for which we have more advanced data. Those three products are, of course, exciting, but we have more data for the PCSK9, which is a very exciting product. and also more data for the old GLIP-1. Long-acting amelion is technically interesting, but we need more data, but it suddenly so far looks pretty good. And we think we can actually, as Sharon said, with the combination of the GLIP-1 and the rest of our pipeline, not only the PCSK9, but also DAPA, and also, potentially, Baxrostat, we can make a difference in the segment of patients who need to lose weight but also manage their cardiovascular risk factors. And in the obese segment, where people need to lose 20-25% of their weight, then we can look at combining our whole GLIP1 with the long-acting amylin and some other mechanisms Sharon, if you want to maybe also add a little bit on how you see this pipeline.

Sure. So I'll jump in on both. People often ask about which molecule I'm more excited about, and I find that very difficult to answer because obviously I'm very invested in all of them. But the first one that you asked about was our oral PCSK9 inhibitor, and we are extremely excited about the potential for this molecule. We will be releasing phase one data at an upcoming conference in the very near future. But I think it's safe to say that we set ourselves a very high bar with this molecule. We asked that it be able to meet a major unmet medical need. We know that despite high intensity statins, about half the patients with cardiovascular disease are not hitting their LDL targets. And so we asked this molecule to be able to offer substantial lowering on top of statins. And we're very encouraged by the data that we see. So we are actively moving forward with this molecule and clinical development and thrilled to be sharing the data at an upcoming conference. Relatedly, you asked about our obesity portfolio. And again, I think I would really think of it more as our optimal weight management portfolio in which we are exploring both incretin and non-incretin pathways as multiple mechanisms to manage both weight and interrelated cardiometabolic and cardiorenal disease. So we are positioned to go beyond short-term weight loss and to deliver long-term weight management. and healthy lean mass management, addressing cardiometabolic risk and also organ protection. And we think that we'll be able to achieve this by driving forward with multiple mechanisms in combination, thinking about both the incretin pathways, as we've discussed earlier with 5004, and non-incretin pathways, for example, with long-acting amylin. Long-acting amylin, as you can imagine, is a different route of administration. and we think could offer some additive benefits outside of that that we're already seeing in the incretin pathway. So we are accelerating several assets through phase one. We spoke earlier about 5004. AZD6234 is our long-acting amylin. AZD9550 is our GLP-1 glucagon dual receptor agonist. And both of those latter two molecules are progressing through phase one. We look forward to sharing the data with you when ready.

Thanks, Sharon. Wood, anything you wanted to add? No. Cool. So let's move to the next question. Sachin Jain at Bank of America. Sachin, over to you.

Hi there. Thanks for taking my question, Sachin Jain, Bank of America. First one's for Dave on TrueCap. Strong first quarter, just any initial launch feedback? And then I'm going to try and go to you. Roche talked to 2 billion for their PI3K yesterday. I wonder if you could talk about the relative profile there. of your asset relative to that and whether you'd go bigger than 2 billion in breast and size, the prostate opportunity that Pascal specifically called out. Second question is for Susan. Avanzar is due in 25. When do we see the data that informs on your confidence? And what I'm after there is timing of any TROC2 biomarker data. And what should we focus on from TLO2 at ASCO? But I think Dyche you've commented too. And then last quick question for Sharon. Applanteson's now 25 plus. Do you still plan an interim next year? Thank you.

Dave, do you want to start?

Sure. Thanks, Sachin, for the question. So on TrueCap, we are really pleased with the launch and following what was a really positive reception to the presentation of the data. We've seen that the uptake is really moving quite nicely. And I think that uptake in the biomarker population really speaks to the need to extend endocrine-based therapies. We see testing rates are well established by NGS in the U.S., so we've got over 60% on that. And while there was a previous standard of care with the PI3K, we're seeing that rapidly get displaced, though still plenty of opportunity to continue to grow within that segment. So demand is off to a very good start, though I think that there is certainly much more opportunity for us to continue to grow. There's some late line bullets that we're probably seeing within the numbers as well. But again, I think that the underlying demand and the indication that we've got is very, very strong. On your specific question also around comparison to the ANOVO 120 data, From my and our understanding, I think that you first have to take a look at the inclusion criteria. The inclusion criteria are certainly different between that study and 291. In that study, the inclusion criteria only include patients who have progressed during or within 12 months of adjuvant ET completion. It's also limited to the PIK3CA patient population. So if you take a look at 291 within that context, we really have the de novo and the non-early relapsers in this second line post-CDK4-6 plus AI setting in addition to the fast progressors. And I see more like three quarters of the patients falling into this de novo non-early relapser population. So I'm enthusiastic about the opportunity in breast cancer. I'm enthusiastic about the opportunity also in prostate cancer. And I think you put these two together and we've got the potential for TrueCap to be a multi-blockbuster.

Okay, thanks, Dave. So for Avanzar, again, yes, as I've said, the trial's going well. But the Trope 2 biomarker data, I expect that we would be able to share those data at a Congress within the next 12 months, certainly. And as far as ASCO goes, one thing beyond the lung cancer data that I would encourage you to take a look at is the I-SPY2 data, which is a neoadjuvant study in breast cancer. Again, looking at the combination of DATO and infimacy in that setting. So, you know, I think we continue to be happy with the profile that we're seeing for data plus IO across the first line settings in lung cancer. The safety is, you know, is looking very reasonable because we've got many patients now enrolled into those first line settings. And again, as we move this combination into the earlier lines in settings like the neoadjuvant setting, I think both the safety and the efficacy profile look encouraging. So yeah. That's what I would point you to, Asghar. Thanks.

Thanks, Suzanne.

And then your last question, I believe, was about the Plontersen CardioTransform trial and our expected timeline for readout on that one. So as I mentioned earlier today, we remain extremely optimistic and excited about the potential for this molecule. And I showed you some early data that came from our NeuroTransform study, which demonstrated a benefit on cardiac structure and function, which gives us additional confidence in the potential for the molecule as we walk through the CardioTransform study. This molecule has the potential to be a best-in-class and transform care for patients with amyloidosis. So to that end, we would like to give this trial the best chance for success and to be able to read the full trial data at the 140-week time point. That in mind, we'll continue to scan the competitive landscape and make the appropriate decisions as we move forward.

Thank you, Sean. And Sachin, on part of your question, we never comment, as you know, on interim analysis. So, of course, we will not do it here either. Next question is Tim Anderson at Wolf. Tim, over to you.

I'm going to start writing up. Hi. Thanks. A couple of questions. On Datto, just an update on your thinking on the lung filing in the U.S., If the overall survival data only continues to be directionally supportive and doesn't fall below the upper end threshold of one, is that enough to get U.S. approval? And then what would that mean for ex-U.S. approval? And when is that next survival look going to occur? And then the second question is just emerging markets. China obviously has slowed from years ago. for lots of companies. What really stands out in your results is that non-China emerging market segment, which is substantial now continuing to grow, but it's just not clear to me what the drivers of that are in terms of geographies and products and therefore what the future growth expectations should be in those non-China markets. So if you could add some commentary, that'd be helpful. Thank you.

Thank you. So maybe Suzanne, you could take the first one.

Yeah. So for DataDxD's tropion lung O1 study, obviously, we've announced that we have filed, obviously, for all regulatory authorities, OS in lung cancer is an important component that they'll want to look at. And we said that the timing of the OS data cut is around the middle of the year. As you know already, that we saw an overall trend in favor of OS on the data arm in the ITT. But what we also saw is in the non-squamish group, you know, a more positive trend with the upper end of the conference interval just crossing one. So, you know, we were looking and hoping that we'll see both of those continue or improve. And I think that will be important piece for the regulatory authorities to look at.

Thank you. Thanks, Suzanne. And the second one may be Leon, who is online, I believe. Leon, can you actually comment on that one?

Yeah, I think, Tim, actually, across the whole geographic, Australian emerging market has been growing rapidly, and almost no exception. And, of course, there is some currency depreciation in certain countries, but overall, still very, very strong growth. And we are also in line with the global new product launch. I think Tagrisso, Forsica, these oncology brands and also rare disease as a new growth driver and is also doing very well across the emerging market. And on top of that, the LOE Post-patent expired products, legacy products, we spend very little resource and also growing nicely to support as cash cow our new launches. And also across the region, we are speeding up approval in many emerging markets. So we launch new products much earlier than before.

Thanks, Leon. So, Ned, Tim, you have really two factors. One is we have a very strong commercial footprint in those countries now. We are actually the number one pharma company in the international region. And so we are leveraging this strong commercial footprint across all sub-regions. The second factor is We actually, a couple of years ago, invested more resources into a specific international region regulatory team. And that team has been fast-tracking filing and approvals of new products in those countries who historically were falling behind their priority geographies. And now we still launch after the U.S. and Europe or Japan in those countries, but not that much later. And we are still working on accelerating this. So those two factors are really the most important growth drivers. The next question, I think, is Matthias Agblom at Handelsbanken. Matthias, over to you.

Thank you so much. Mattias Egblom, Handelsbanken. Two questions, please. So firstly, on DataDXD, you initiated a couple of additional phase three programs during the quarter with your partner. So what makes you so confident to continue to invest into these programs or ask perhaps differently with investor communities still skeptical to DataDXD? What in particular is it you see that investors may miss? And then secondly, as one of few companies with both bispecific antibodies as well as cell therapy capabilities in-house, can you talk about how you think about engaging these tools into autoimmune disease where there is emerging early data from both sets of technologies that looks promising? Thanks so much.

Thanks, Matt. So first question, I think, would go to Suzanne. And the second, Sharon, you'll take that one? Okay.

Yeah. So thanks for asking the question about Datto DXD. So yes, we have announced that we're starting Tropion Lung 10, which is a combination with Rilvogospinig, RPD1, TIGIT bispecific, and DATO, compared to PEMBRA and locally advanced first-line non-small-cell lung cancer. And again, that is a program where we're going to be looking at this activity in a biomarker-selected group as well. But it also includes the ability to compare Vilvogustamig directly with Pembro in that setting. So I think what underpins confidence there is both the combinability with IO that we have seen in different settings, the potential for some added efficacy for the addition of the TIGIT mechanism of action as part of this bispecific within the PD-L1 greater than 50% patient population, as well. And we think that this can be a winning combination in that setting. The other important study that I draw your attention to is the tropion lung 14 study. This is a combination of DASO-DXD and TIGRISO in the first line, non-squamous EGFR mutant, non-small cell lung cancer. And again, this builds on both safety and efficacy data that we've seen from the Orchard platform study that we have in a post- third-generation EGFR inhibitor patient population in the EGFR mutant, and also the safety and combinability for that combination. So that's what gives us confidence. You know, as you may have seen in the tropion lung O5 data that was published, there's actually really good activity for data DXD within the EGFR mutant population. And given the FLORA2 data, which we've also seen, I think that that also builds confidence in the ability to combine to GRISO with chemotherapy and directed agents. And so I think this has the opportunity to further build on the data that we had from FLORA2 and the data from ORCHARD and really have a winning combination in the first line setting for EGFR mutant non-small cell lung cancer.

Thank you, Suzanne. Sharon?

Sure. So thank you very much for the question about cell therapy and bispecifics in autoimmune disease, because I think it's a really interesting topic that has become a key focus for us. As we think about how we manage diseases of immune dysregulation, we are moving from managing symptoms to modifying disease by addressing the causality of disease. And the mechanisms that you mentioned, cell therapy and bispecific molecules, are two excellent modalities that allow us to really address the causality of disease. So to that end, we have invested in internal capabilities, but also accelerated our ambition with recent acquisitions. As you saw, we very recently closed an acquisition of Gray Cell, which brought to us some, I think, leading capabilities that allow us to really accelerate our ambitions in cell therapy for patients with autoimmune disease. And specifically, Gray Cell has a BICAR-T, which they have used to complete an investigator-initiated trial in China. for patients with systemic lupus erythematosus, or SLE. And we look forward to sharing those data at an upcoming medical conference, but I think it's safe to say that the data that we have seen across the patients treated is at least as compelling as anything that we have seen in the published literature. And because it gives us lots of excitement and optimism about how we may be able to address SLE for patients moving forward. At the same time, we're also investing in our internal platforms for creating T-cell engagers, which we think also could be a very powerful modality in the autoimmune space.

Thank you, Sharon. Mark Purcell at Morgan Stanley.

Mark, over to you. Yeah, thank you very much, Pascal. Two questions. The first one, the US oral oncology products, the product sales there were very strong in the quarter. Could you help us understand the impact of treatment initiation dynamics and potential changes in affordability? And then secondly, on the Fusion Pharmaceuticals platform, for FP1-2265, can you help us understand your plans for moving into the pre-taxane setting? Would you do a head-to-head trial there versus Plevicto potentially combined with Part 1? Obviously, understanding that the post-Plevicto opportunity itself has blockbuster potential anyway. Thank you very much.

So, Mark, thanks. I'll take the first question, probably Susan on the second. I mean, I think the first important piece is that within the quarter on our oral oncolytics, particularly with Calquence and Tegresso, we saw a strong market share performance. Calquence remaining the leading BTKI and frontline CLL and strong continued demand growth for Tegresso and Adjuvant and frontline and encouraging early Flora 2 launch. With that said, also, we do see early encouraging trends of lower abandonment and improved access due to affordability, though it really is too early to quantify. And of course, recall, Mark, that in 2024, there's no added liability associated with Part D, whereas it comes in in 25. But we'll continue to keep updated on how those dynamics on affordability evolve over the course of the year.

And Mark, on your second question, the deal hasn't closed and so we are not able to comment at this point in time. Sorry about this and hopefully we can give you an answer pretty soon. Richard Parks at Exane. Richard, over to you.

Hi, thanks for taking my questions. Firstly, sometimes when speaking to investors, I get the perception that there's a feeling that AstraZeneca is maybe spreading itself too thinly with expansion into vaccines, cell therapy, radioligant. Just wondering how you respond to that, whether you see any risk of the organisation losing focus and how you're thinking about some of those investments in new platforms. It feels to me like there's more you're just thinking about that the day after tomorrow. So that would be very helpful. And then on Aspera, could you just talk a little bit more about the opportunity you're seeing? Obviously, we've seen some very large drugs in that category in the past. And just think about how your thinking has evolved on the opportunity since the launch. Thank you.

Thanks, Richard. Let me try the first question and be rude. You could cover the second one. So the first question, I think... First point is, I'm sure you've realized we have a very, very strong team and people are very focused on oncology, biopharma, rare disease and managing their portfolios. Second point is we are now a $50 billion company, so you really need a portfolio to continue growing. I think this is one of our strengths. We're not depending on two or three products. We have a portfolio of products that are driving our growth, and we can actually highlight that better to you at the investor day very soon. Third point I would make is that actually this portfolio actually gives us the opportunity to combine. And again, that's what we want to highlight during the investor day. We're a unique position to combine in oncology across ADCs by specific IO, potentially in the long run. take an approach to solid tumors to address the tumor with a combination of ADCs and by specific and follow this with TCEs or cell therapy. In the cardiovascular space, Sharon has covered it, we can combine across the GLP-1 and PCSK9 or the other agents, DAPA, of course. So I think these are the things that actually help us. On the vaccine front, I think there's sometimes a misperception of what we're trying to do. We're not trying to build a vaccine business like vaccine companies have. We are actually targeting vaccines that will be synergistic, strategic to our oncology, vaccine and antibodies, by the way. they're synergistic to oncology or respiratory disease products that will protect patients from exacerbations of copd or asthma products that would protect patients from covid or flu infections if they are say, cancer patients, blood cancers in particular. So this is really what we're trying to do, always try to be implementing a sort of a strategic synergy across our portfolio and leverage our expertise and our strengths in various places. So I don't think we are to thin and then to thin spread. The challenge and the opportunity in our industry is always to be able to think about today, but also the long term. It would be very easy, quite frankly, or easier to focus on the next four or five years. But we also have to think about what is going to shape the medicine in five to ten years. So that this company remains a gross organization, not only in the next few years, but in the long run. And so that's always the challenge is really to manage our near term, long term. But also it's an opportunity. If we do that well and if we play our hand very well, we can be very differentiated as a company.

So, Rod, over to you. Yeah, of course, and thank you so much for the question, Richard. First of all, S3PRA is quite a unique product in the United States because it's the first rescue therapy for asthma patients above 18 years of age. It's a very substantial market, the short-acting beta agonist market. Just to give you a little bit of context, roughly 35 million inhalers are prescribed every year for the 18 plus population in the United States. So the volumes are very, very substantial. And we truly believe that we have a product in place which can change the treatment paradigm of as needed rescue medication in Of course, it's still early days, but the fact that we already see a very substantial number of scripts every week, plus that more and more physicians are prescribing it, I truly believe that over the next few years that this product will become a blockbuster molecule. And equally, we're also looking for other opportunities in other geographies in the world. especially in the middle east we see good opportunities to launch the product there as well in in the in the next few months so all in all very bullish regarding the forecast and the potential of this product moving forward thanks good the next question is from christopher at seb christopher over to you hi can you hear me yep oh good

So, yeah, I guess the first question is a lot of the key sort of Part D products, and I guess the U.S. in general, had really strong performance. Can you quantify how big a headwind the typical U.S. coverage resets amount to and what factors beyond strong demand help explain why Q1 was so strong and roughly how much did they collectively contribute then to top-line growth, noting that, for example, Farxiga was one of those factors with the authorized generic And then my second question, which pipeline events for the rest of 2024 do you get most excited about and which do you think the street might be underappreciating and what are we missing if so? And if I could sneak in the last one, you said M&A will slow down earlier today, I've read, as you've got most of what you need. I know you don't have a K-RES, though. Perhaps you could tell us what your thoughts are around K-RES and why that isn't in your portfolio.

Thanks, Christophe. So maybe, Aude, you could take the first one, and I'll try to address the others.

Yeah, yeah, an excellent question. We have seen very strong growth in the United States for both Farsig and Symbicord. It's driven by two different factors. First of all, we have launched an authorized generic of Fasig in the United States for the option for patients to have a low cost option as well. And so far we are very pleased with that introduction of this new, not new medicine, but this new offer to patients. And of course, we will not know until, let's say, a few quarters more how the product will perform. But so far the feedback has been extremely strong. Equally, I think it's important that looking at Fasig in totality, that the growth across the world is extremely strong on the basis of the CKD and heart failure indications. And there's no reason to believe that that will slow down anytime soon. So that's good news. Same because we have lowered our list price, the so-called VAC price in the United States, like other competitors have done as well. So we need to see how that will evolve in the next few quarters. So it's a little bit of a new dynamic in part d let's say in quarter one for for our products but all in all a a very nice first a few months and we will monitor it very closely of course moving forward thanks for the other two questions quickly in the interest of time is the pipeline

And what is more exciting, until 2030, Christopher, I would again invite you to join us in Cambridge. We are offering free tickets, a visit to beautiful Cambridge, and I'm sure we'll find a way to give you a nice lunch too. On the M&A, I said it will slow down. It doesn't mean it will be zero. What I meant to say earlier in terms of slowing down is from a technology, from a platform viewpoint, I think we have... acquired and built most of what we need for now, and we need to execute on what we've got. But it doesn't mean, of course, BD will come down to zero. And in terms of the specific CARAS question, I won't answer this one, but we have our own internal program, and we can discuss some of those things again in Cambridge. So I'll move to Eric Leberigo at Stifel. Over to you, Eric.

Thank you, Pascal. First question to come back on Froxiga and Simbicort in the US. Maybe more specifically on Froxiga, is there any way we can get any idea about the one-off that could be into the Q1 members with inventory build-up for the authorized generic? And on Simbicort, in the context of the drug being genericized in the US, we're expecting sales to go down It was up 28% in Q1. What could be the dynamic for US Symbicort for the full year 24? And then a more general question. We see more and more companies simplifying, streamlining the organization by combining the different divisions in one single project. like vaccine with pharma or onco with the rest of pharma, and you're still operating with different entities like onco, biopharma, Alexion, VNI. Could you maybe summarize, maybe you're thinking about doing things differently, but the benefits of doing the way you do and benefits versus risk and complexity? Thank you.

Yeah, so let me start with this question and how you can cover Fasiga and Simicort in the US. It's not still, it's actually we moved to that structure not that long ago. A few years, of course, but in our industry, two, three years is not a long time. I truly believe in the importance of being focused. On the one hand, people say you have too much. On the other hand, we say, well, you know, put everything together. So I think the reason why we can succeed with our portfolio and leverage that portfolio is because, indeed, we are focused on oncology, biopharm, and rare disease. And anybody who is operating in oncology, I think would hopefully agree with me that oncology is very specific, rare disease is very specific, and just the same as cardiovascular. You need to build capabilities, and you can only do this if you do two things. First of all, recruit the right talent to understand the environment they are in, and secondly, create a culture and a community where people feel they work together to the same goal. In the case of cancer, the goal is eliminate cancer as a cause of death. And every community in the company has this total focus, that shared purpose, and that's what drives people. People come to work to make a difference and make a difference in the field they are in and the field they love, typically. So I think this is really the reason why we can actually succeed and we intend to keep that structure as it is. Aude, over to you.

Yeah, thank you once again, Eric, for the two questions. First of all, once again, let me remind you about The US is a very important market for Fasiga, there's no doubt, but it only represents less than 25% of our global sales. And we are very pleased to see that the brand is growing extremely fast, not only in the United States, but across all the other geographies. Specifically to your question, can you provide a split between the authorized generic And the brands, the short answer is we're not going to do that. But equally, of course, you can look at the script volume. If you analyze the script volume of Fasiga, it's the Fasiga brands as well as the authorized generic. Now, whether the strong initial growth will continue moving forward. We need to see that. We simply don't know. Equally for Symbicord, it's quite amazing that after more than 20 years of initial launch that Symbicord is still annualizing more than two billion dollars a year. Very fast growth again in the emerging markets, but also equally this year so far in the United States. And it's heavily driven by the fact that we have an authorized generic available as well as we have also lowered our the so-called list price in the United States. So it becomes more affordable for many patients. And once again, whether that will continue during the course of the year needs to be seen. But so far, it's very pleasing to see that both brands are off of a very strong start in the United States, as well as outside of the United States.

Thanks, Ross. Maybe I would add that everybody talks about one-offs, and to be honest, I'm not sure why there's such a focus on one-offs. If you look at Farciga in the U.S., Q4 sales were $450 million. Q1 sales are $470 million. And if you look at the trend over the last few quarters, we've had a very strong trend. And if you marry that or combine this with the prescription trend Rud was talking about, There is certainly a little bit of a stock up, but it is not really what drives the trend for farciga. It's a very strong trend, not only in the U.S., but across the world. So every country is behaving the same way. We have very strong uptake in kidney disease, heart disease, diabetes, et cetera. The next one is Steve Scala at Corwin. Over to you, Steve.

Oh, thank you so much. I have two questions. First, DBO6 hit its primary completion in March. Is the data in-house and is that underpinning your confidence? And second, why is there what seems to be a long delay in presenting the oral GLP-1 and oral PCSK9 data? I could think of four possible reasons. One, there's a lack of appropriate venues. Two, AstraZeneca is strategizing on next steps on how to approach the market and wants to figure this out first. Three, there's some issue with the molecules or data that you're working through. Perhaps it is underwhelming. Or four, we're just being too optimistic on how long this all takes. So any thoughts would be appreciated. Thank you.

Thanks, Steve. So let me just address the last one quickly, and then we could talk about DBO6. And you forgot one option, which is our policy, and our policy is to present data at medical congresses, and that's what we have decided to do. We stick to this. But maybe your second option is also part of it, for sure. We are in the meantime strategizing what we're going to do with our portfolio and how we develop this product. but but really the driving force is simply we we debated it internally because you raise a good point but we concluded we didn't want to do a to to to come up with an exception here and so you'll have to wait for uh the next potential option as a medical congress We are, as we have said, and I think I can confirm, we're starting phase two this year. So we are very much on track and we will not be preparing phase two if we were not confident with the oral grip one. GB06, Suzanne, do you want to cover that?

Yes, sure. So Destiny Breast 06 is obviously a setting earlier than Destiny Breast 04. It includes the IHC 1 plus and 2 plus as well as a group of the ultra low group. And the confidence in Destiny Breast 06 is really built from the Destiny Breast 04 data set, you know, which we obviously presented earlier. Some some time ago. So we are looking forward to the to the data. You know, we said it's the first half of this year. So hopefully you don't have to wait too long for getting the getting those data. I'm eager to share them with you. And again, just as a reminder, the primary endpoint is PFS in the HER2 low groups, the IHC1 plus and 2 plus. And then there'll be descriptive analysis of the HER2 ultra low patient population as well. And as a reminder further, you know, even though these patients are below the 1 plus category, they still have a higher number of HER2 receptors on the cell surface than normal epithelium. So just to put numbers on that. Normal epithelium for HER2 is about 20,000 receptors per cell. At the 1 plus to 2 plus range, it's between 100,000 and 200,000. So in that ultra-low group, you've got somewhere between 20,000 and 100,000 receptors per cell. So you can see that there's probably a significant proportion of that group that will have a higher expression level of HER2 on the cell surface than normal epithelium would. And that's one of the reasons why we think there's a potential to go beyond the 1 plus group into that ultra-low group and see benefit over the current cellular care chemotherapies.

Thanks, Suzanne. Next question is from Simon Baker of Redburn. Over to you, Simon.

Thank you, Pascal, for taking my questions. Two, if I may, please. Firstly, going back to Fark's seizure, I just wonder if you could Talk us through the rationale for the timing of the authorised generic now. I may be missing something, but the compromise pattern goes in October 25. So some thoughts there would be helpful. Alongside also the FDA issuing a request for paediatric studies in March 2019. That hasn't yet been reflected in the Orange Book. So I just wondered what the status of that was. And then secondly, on tropion lung 10, you've moved forward with one of the combinations, which is in the tropion lung 04 study, obviously on high confidence. I just wondered where your confidence rests with the combination with volvostimic and sebestimic. Thanks so much.

Thank you, Simon. So, Rod, in the past you were complaining not enough questions. Well, Farmer, you're not going to complain too many questions. No, no, no.

Could be less, but no, it's a great question, Simon. So why now? It's relatively straightforward. First of all, we have a huge opportunity still in CKD in heart failure. And it is clear from all the analytics we have done that a lower cost option for some of those patients are very important in order to capture even more volume. The second one is also true that to some extent it also mitigates the impact of a potential MCAP, so the inflation penalty, in the United States as well. So those two factors were important regarding the timing. Regarding the pediatric indication, it's not yet in the Orange Book, so that's a very good observation, but equally we feel comfortable that the FDA will grant us the pediatric indication and hence Our base assumption is still that the patent will stay in place till April 2026, which we have signaled multiple times.

Thank you. Suzanne, do you want to cover the second question?

Yes. So the tropion lung 10 studies I mentioned before is the combination with vilvogostomig and DATO. And it's in a patient population that's greater than 50 percent. As we said before, what we see in terms of the evolution of the IO checkpoint inhibitor landscape is a segmentation effect. And our two bispecifics, we see the rilvogostomig PD-1 TIGIT as being focused on the IO-sensitive, more highly expressing PD-L1 part of the population. And that's, you know, in line with what you see in terms of the patient population in tropion lung 10 and rilvogostomig. we're focusing that on the tumour types where CTLA-4 sensitivity has been demonstrated and can add extra efficacy. Obviously, with volvostimic, you know, it is designed to be better tolerated than the combination of CTLA-4 and PD-1 separately because it only binds CTLA-4 in the presence of PD-1. And we have shown an improved safety profile, but it still does have more side effects than you get with a PD-1 agent on its own or with vulvogustamide. So we will select that drug where it will make the biggest difference. And you'll see that as you see the evolution of the evolved studies with vulvogustamide.

Thanks, Suzanne. Next question is from Andrew Behrens at Lear Inc. Over to you, Andrew.

Hi, thanks, and congrats on the strong quarter. I had a big-picture question on the AKT class, given the results of CHUCAP. Just wondering how you see it integrating in the evolving paradigms. It's obviously incredibly dynamic, and specifically would like to know how you guys see the AKT class integrating with CDK2 agents, CDK4 selective drugs. the oral SIRDs, the graders, and also the ADCs that are starting to spread their wings into a number of these areas.

Okay, Andrew, thank you. Thank you for asking one question. Actually, Suzanne, over to you.

Yeah. So thanks for the question. So AKT is obviously part of the PI3 kinase AKT pathway, which is the most commonly mutated or aberrant pathway in cancer. So we think this is a very important mechanism. And, you know, we we are looking at combinations of capivacertib with AKT. our camisestrin, our oral CERD, a drug that's already in multiple phase three trials as well. So I think there's potential for it to be further expanded beyond the current set of trials that we've already got in development. And I do think there are data that it can be a potential combination agent with a number of the other things that you raised. We do have a CDK2 inhibitor, a highly selective CDK2 inhibitor, which we profiled at the AACR meeting That was in San Diego earlier this month. We think that's a very exciting molecule that will address the resistance mechanisms to the CDK4-6 inhibitors. And so I do think that this class of agents can be combined with the emerging both new endocrine backbone agents and the newer versions of things that address the CDK4 mechanism and the resistance to CDK4, which typically is represented by sensitivity to CDK2 inhibition.

Just maybe to also build onto Susan's answer, and I think what's important and great about this is we're talking about leadership in breast cancer, and as part of that leadership in breast cancer, we're really looking to build and improve upon the two existing pillars in the treatment of metastatic disease, and then adding a third. And the existing treatments and existing pillars are ET plus or minus CDK4-6, and then obviously chemotherapy. I think what's important about the AKT class is it gives an opportunity for patients to continue to stay on ET-based therapies, which has a lot of benefits associated with it. We also know, though, that at some point ET therapies are no longer effective and that it's a time to start to switch towards chemotherapy. And within that, that's where the ADCs now create a third new pillar that sits in between classical chemotherapy and ET-based approaches. We hope that DBO6 will provide even a further therapy option that sits within this. But you start to see the opportunity to begin to offer to physicians more options for how they can think about treating their patient as the disease progresses. And we've got best-in-class therapies to go into each of those pillars and then gives us an opportunity to look at combinations down the road.

Thanks, Dave. Actually, this discussion gives me a chance to go back to, I think, the question Richard was asking earlier about the pipeline. I mentioned combinations, but also this pipeline enables us to actually shape the treatment algorithm, as Dave was suggesting a minute ago, in breast cancer or lung cancer. And it also enables us to better partner with lung cancer oncologists or breast cancer oncologists and really truly be part of the way breast or lung cancer or other cancers are treated. And it's true for cardiologists, not only managing cardiovascular risk, but also if you look at amyloid doses, we have 2220, which is an amyloid depletor. We also have a plantarsan. So, again, all of those things will give us a great chance to partner with key physicians, but also leverage our portfolio to shape treatment algorithms and look at combinations. Emily Field of Berkeley. Emily, over to you.

Hi, thanks for taking my questions. Just two on respiratory. You know, a lot of excitement about the tezopelimab COPD data to be presented at ATS. Given what we've seen so far, is it your expectation that this would be taken in late stage development in a broader eosinophil population, i.e. over 150s and over 300s? And then on the back of that, you know, similar to the obesity question that was asked earlier, you have so many assets in late stage development in COPD data. You know, maybe asking from our side, what should we be focusing on in terms of just all of the late stage COPD programs that you have? Thank you.

Thanks so much for the question. So I'll start with your first one, which was about tezopilobab and our phase two course study. And then I will speak more broadly about the COPD portfolio. So you touched on TEZI and our recent phase two trial completion, and we look forward to presenting those data at ATS in the very near future. As I'm sure you know, TESI is a monoclonal antibody directed against T-slip. It is the only biologic approved for severe asthma with no phenotype, and we see tremendous potential for this molecule in COPD. The course phase two study was specifically designed to look at a broader population of patients. So it included patients irrespective of inflammatory drivers, eosinophil levels, emphysema, chronic bronchitis, and smoking status, while other trials were more limited. And this included a pre-specified subgroup analysis in populations with different eosinophilic levels, so including below 150, above 150, and above 300. We will present the data that we fully analyzed at the upcoming ATS meeting. But I will only venture to say that we are excited about the possibility of TESI in a broader population. It is worth noting that other molecules in this class are playing in the high eosinophilic levels at more than 300 eosinophils per microliter. And that's only about 35% of the population that's eligible for biologics. But those above 150 eosinophils per microliter are about 65% of the biologics eligible population in COPD. So we think that's a really important differentiator for this molecule. Now you also mentioned, I think you also asked us about our plans to go forward. Together with our collaborators at Amgen, we are actively planning the next stage of development You asked about our overall portfolio in COPD, and I think it's worth mentioning here that COPD is a very heterogeneous disease with multiple drivers. And to that end, we think that there are multiple mechanisms that may have substantial clinical benefit. So we are testing multiple mechanisms, and we are testing them in populations that allow us to differentiate them from each other. Tozaracamab, as we have previously described, is a differentiated IL-33 monoclonal antibody because it can bind and block both ST2 and RAGE-EGFR signaling. We think that's really important in this disease because it not only blocks the inflammatory pathways, but it can also block mucus production and epithelial remodeling through RAGE-EGFR. So we view that as a differentiated mechanism, which we think may also have very broad utility in the COPD population. So early days, we are reading into our Phase 2 data and thinking about our Phase 3 plans going forward, but I think that we have the potential to be really paradigm shifting for people living with COPD.

Thank you, Sharon. Louisa Hector at Berenberg. Louisa.

Hi, thanks, Pascale. Perhaps I could touch on capital allocation. So your high burden of the deal-related payments does start to ease at the end of this year, so that improves your cash flow outlook. So will this lead to a change in the nature of deals which you can do? And perhaps you could remind us of your dividend policy, given the slightly unusual announcement of the 2024 dividend recently. Thank you.

Thanks, Lisa. Aradna, your favourite question?

Yes. Thank you, Louisa. So our capital allocation priorities remain unchanged. As you've seen, we've been very active on the BD front, but we also now sort of need to create value actually from the acquisitions and the partnership transactions we've done. So we need to focus on execution of those transactions. We did announce a 7% dividend increase in line with our progressive dividend policy, but also recall that we did not increase dividends in 2022. And so, you know, the board takes a decision on when and how they can increase dividends based on our overall capital allocation priorities. But the capital allocation remains unchanged.

Thank you, Arnaud. So thank you very much for your great question. I think it is time for us to respect your time and close this call. Again, thank you so much for your great question and your interest in AstraZeneca, and have a good rest of the day.